JLL healthcare comments on failure to address social care reform in the Autumn Statement

2016-11-23T06:00:00Z

​November 23rd 2016 – Following the Chancellor’s Autumn Statement, Eamonn Meadows, Associate Director in JLL’s Healthcare team, commented: “The lack of any substantial reform for social care funding in the autumn statement represents a missed opportunity. Without urgent and concerted efforts to address the social care-funding gap, we expect to see unprecedented strain across the NHS in the coming months. While investment opportunities remain fundamentally strong, particularly in the mid-market, there remain serious concerns about the public-pay model of care, with record numbers of care businesses becoming insolvent this year. The increase of staffing costs following the rise in the NLW to £7.50 per hour from next April will only add to the pressures at the lower-end of the market.

“As home care providers, such as Mitie, continue to withdraw from local authority contracts, pressures on the NHS will only escalate, as evidenced by the rise in delayed discharges and emergency re-admissions to hospitals. Local authorities are under sustained pressure to cut costs but this risks being delivered at the expense of safe and effective care.

“Despite the immediate challenges, there are significant opportunities for the private sector to bridge the gap and demonstrate to government how costs can be saved through innovative new care models. There is rising demand for retirement housing providing accommodation for people who want to take control of their housing and care needs as they age. The development of patient hotels and step down care facilities are prime examples of how the private sector is creating support structures that could help alleviate some of the pressures on the system.”

James Kingdom, Associate Director in JLL’s Research team, added: “The increase in household wealth and equity amongst those over 65, both in recent years and over the course of the next decade means that more people than ever before have the ability to pay for their own care. The government’s inaction creates an enormous opportunity for investors and operators to fill the significant void for a mid-tier of care home provision aimed at those excluded from public pay and the South East focussed prime market.“